Heading south on the 101 from San Luis Obispo as I neared the Avila Beach exit I noticed what I thought was a bright yellowish star in the southern sky. It appeared to be getting larger as if it were an approaching aircraft. Then it dropped altitude gained rapid speed and came to a stop approx. 500 ft. over the 101. It was at this time that I noticed it had no aircraft beacon or navigation lights but was giving off one intense light that seemed to change color from yellowish to a bright white. As traffic approached cars were slowing and pulling off the freeway, others were speeding up and trying to flee the scene. As I travelled under the object I looked up and saw a dark circular edge around the light. The object then accelerated vertically at which time the color turned a redder hue. After reaching a height of approx. 3,000 ft. it headed west out over the ocean changing shape several times before dimming out as a foggy white light in a coastal low cloud layer. I pulled off the freeway at the Avila Beach and there were other people pulled off the side of the road trying to figure out what it was.